IRS Seizing Innocent Citizens’ Assets
May 2, 2014 9:16am PST
It’s not really a secret that most Americans don’t trust the government, in fact poll after poll shows that the vast majority of us trust a common thief more than we do the people in our government and what’s worse is that it does nothing to try and change that.
The tax code is probably the most arcane set of regulations in America and it’s enforced by the Internal Revenue Service, which is the most feared and cumbersome agency in our nation. The two combined make for a country where people live in fear of failing to comply with every little detail or face losing their property without due process.
George Will recently wrote a column highlighting the struggle that a Michigan family faced when the IRS came knocking on their door. Their “crime”? They made too many cash deposits under the $10,000 threshold for reporting and the IRS immediately assumed they were a part of a criminal enterprise.
Terry Dehko and his daughter Sandy Thomas have a grocery store in Fraser called Schott’s Supermarket that Terry purchased when he moved here from Iraq in 1970. As most immigrants do, he purchased the store and has been working there ever since, six days a week.
In 2013 the IRS waltzed into their store and informed them that they had seized more than $35,000 without warning. According to Sandy, who’s a mother of four and has a master’s degree in urban planning, agents just walked in and announced they had drained the store’s bank account.
Federal law states that businesses aren’t allowed to structure their deposits to circumvent the laws that require cash deposits over $10,000 to be reported. So when Terry and Sandy frequently made cash deposits of less than $10,000 a red flag was raised and the IRS took action. However rather than asking them why they were doing that, they simply seized their money.
Since 35% of Schott’s sales are in cash, the pair frequently had to make deposits in order to not have large amounts on hand in case of theft. Additionally their insurance wouldn’t cover any cash losses that were in excess of $10,000, so they were kind of in a catch 22.
Agents had already visited the store in 2010 and 2012 and found that they weren’t in violation of any regulations or banking laws. However in January of 2013 the IRS obtained a secret warrant that allowed them to drain the bank account. Ironically, had the IRS acted just a day sooner they would have only had $2,000 in their account, according to Sandy, coincidence?
The IRS was able to use “civil forfeiture” laws in order to steal the pair’s money without due process. With these laws, all it takes is suspicion of illegal activity and the government can take action and steal your property.
As Will points out in his column, “The civil forfeiture law — if something so devoid of due process can be dignified as law — is an incentive for perverse behavior: Predatory government agencies get to pocket the proceeds from property they seize from Americans without even charging them with, let alone convicting them of, crimes. Criminals are treated better than this because they lose the fruits of their criminality only after being convicted.”
Had the IRS simply talked to Terry and Sandy they would have found the reasons for which they appeared to be violating the law. However because of civil forfeiture they didn’t have to, and more than likely didn’t want to.
Such laws violate our rights to due process and require everyday citizens, guilty of nothing, to prove their innocence to a tyrannical government in order to retrieve what is rightfully theirs. Terry and Sandy were offered 20% of their money back from the IRS after explaining to them what was happening, however they obtained counsel from the Institute for Justice and were able to get it all back.
This type of thing is happening all over the nation and innocent people are spending small fortunes in legal fees when they have done nothing wrong. The IRS is perhaps the worst perpetrator of bullying and extortion on Americans, and until such laws are repealed we will only see more of the same.
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